U.S. transportation board goes for iPhone and drops BlackBerry on performance

BlackBerry smartphones are being dropped by the U.S. National Transportation Safety Board in favour of the new iPhone 5, with "performance issues" cited as the reason.

The Washington-based board, the latest American government agency to turn away from the BlackBerry, said it needs reliable devices for its employees to investigate accidents, often in remote locations.

"These Apple devices will replace the NTSB's existing BlackBerry devices, which have been failing both at inopportune times and at an unacceptable rate," the transportation board said in a recent document.

Research In Motion (TSX:RIM) has lost several other U.S. departments and agencies as clients. They include the Defence Department, the Transportation Security Administration and the Bureau of Alcohol, Tobacco and Firearms, which have also chosen the iPhone.

Although the National Transportation Safety Board didn't go into many details about why it's dropping BlackBerry smartphones, RIM has had two email and text message service outages in the last year.

"Due to performance issues with the BlackBerry devices, the NTSB desires to transition to a different device under Verizon’s device refresh program," the safety board said.

The latest switch by a U.S. government agency comes before the launch of RIM's new BlackBerry 10 operating system in early 2013 — widely considered a make or break product launch for the company.

Research In Motion said on Wednesday that government organizations around the world can continue to trust the reliability and security of BlackBerrys.

"We have one million government customers in North America alone who depend on BlackBerry, and more than 400,000 government customers worldwide upgraded their devices in the past year," said Paul Lucier, vice-president of global government solutions at RIM.

"We are committed to the mobility needs of government agencies around the world and will continue to meet these needs with BlackBerry 10," Lucier said in a statement.

RIM recently announced it had won U.S. government security clearance for its devices with its BlackBerry 10 operating system.

The Waterloo, Ont., company expects the new operating system, with an improved web browser, will enable it to better compete against the iPhone and smartphones with the Android operating system.

RIM's latest outage was in September, the same day that Apple's new iPhone launched in stores. In Oct. 2011, RIM's outage lasted several days affecting millions of users globally.

Telecom analyst Anil Doradla said RIM's two service outages should been seen as a key factor in the NTSB's decision, and the board is likely also taking a long-term view of the company.

"Will this company survive in five years, in four years?" said Doradla, of Chicago-based William Blair & Co.

"You have to look at what happened in the context of their network outages, which by the way, we cannot guarantee will not happen again," he said.

Doradla said the iPhone is now considered about as secure as the BlackBerry.

The safety board also said the use of iPhones will be compatible with the use of Apple iPad tablets by its employees.

Having an iPhone is just an extension of having an iPad, Doradla noted.

"The NTSB requires effective, reliable and stable communication capabilities to carry-out its primary investigative mission and to ensure employee safety in remote locations," the board said in a filing posted on the U.S. Federal Business Opportunities website.

Queen's University business professor John Pliniussen said the outages didn't help RIM and the transportation safety board likely has high security standards and decided to make the switch.

"The competition is just offering a better package," he said from Kingston, Ont.

"I've never heard of a security issue related to the iPhone 5, or any iPhone product," said Pliniussen, associate professor of innovation and Internet marketing.

Pliniussen said "this isn't the first and it won't be the last" client dropping RIM.

"It seems like to have the best now, it means start dropping RIM."

Shares in Research In Motion were up 48 cents, or almost five per cent, at $10.18 in afternoon trading on the Toronto Stock Exchange.